Lewis Drug employee Megan Teslow straightens out board games and other holiday merchandise along "Gift Street" at the South Louise Avenue store. / Jay Pickthorn/Argus Leader

The Lewis Drugs File

Lewis Drug's pharmacy in the store at 69th Street and Louise Avenue has a new design. / Jay Pickthorn/Argus Leader

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The unofficial start of the holiday shopping season this year will occur as many people are barely done cooking Thanksgiving dinner. Retailers who pushed up their early morning openings to midnight last year will offer door-busting sales even sooner, with some luring shoppers Thursday evening.

In retail, even a tradition such as the Black Friday shopping bonanza is subject to constant change.

But at Lewis Drug, the doors will open Nov. 23 at what President and CEO Mark Griffin calls a more rational 6 a.m.

“And we’re not open for Thanksgiving (evening) either,” Griffin said. “You have to draw the line somewhere. We try to satisfy the customer with an early opening and great products.”

Knowing what customers want and how to serve them has helped Sioux Falls-based Lewis Drugs Inc. navigate seven decades of industry change. The company has grown from the first self-service drugstore in the city to a 1,000-person organization with more than 30 locations in three states.

Now in its 70th anniversary year, Lewis’ future leadership also came slightly more into focus. Griffin convinced his daughter, Nikki, to move back to Sioux Falls and begin learning the business.

“She is exploring all the different facets of the business and working with our division heads to learn the business from all angles,” he said.

Nikki Griffin, 32, graduated from Roosevelt High School before studying in Chicago and the Twin Cities, most recently graduating from law school. Like many parents, Griffin worked to lure her back to Sioux Falls.

“I said, ‘Maybe we can do a slow transition?’ and she said, ‘Real slow?’ ” he recounted. “I said ‘Real slow.’ ”

Nikki, who calls the opportunity both exciting and intense, talks with enthusiasm about everything from new promotions and programs to the city’s downtown.

“It’s a great place to live,” she said. “I get to see my family, and it’s a cool community and more accessible than bigger cities. I really like the cultivation of downtown and how it’s becoming a more vibrant, cool area. It’s unique, and it wasn’t there when I was growing up here.”

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Generations of leadership

Nikki is the third generation of her family to help lead Lewis Drug. Her grandfather, John Griffin, was one of three company founders. The namesake is co-founder Jesse Lewis, a pharmacist whose license allowed the pharmacy to open.

“But he got fed up, didn’t think we were going to make it and moved to Omaha,” Mark Griffin said. “Obviously, a bad move on his part.”

The first Lewis Drug opened in 1942 in downtown Sioux Falls. It was the first drugstore in the upper Midwest where customers could pick up items without asking a pharmacist at the counter. But it was the store’s location across from the State Theater that brought an unexpected and invaluable bump in business.

“My dad used to tell me they kept the doors open during the war by selling popcorn and soap and the basics of life,” Griffin said. “Popcorn was a great opportunity because they priced it much cheaper than the theater across the street to get people in the doors.”

While he grew up in the stores, Griffin didn’t set out to work there. He spent time in Arizona and Atlanta before returning to Sioux Falls for a job in the security industry as a broker. His dad’s business partner suggested he join Lewis Drug.

At the time, Griffin told his father he hoped leaving the fast-paced financial world wouldn’t make him bored.

“He leaned back in his chair, smoking a pipe, and said, ‘Don’t worry, you won’t be bored,’ ” Griffin said.

Griffin became CEO in 1983 and said he tries to lead by example.

“I try to treat everybody the same and fair,” he said. “I’m there for people, develop a mission and a goal, and work with people to attain that goal but give people plenty of rope.”

In recent years, the company has grown along with its competition. Griffin led Lewis into store expansions, acquisitions, new business relationships and new business models.

“The basics of retail are still there,” he said. “You have to satisfy the customer. The difference … is people’s time compression and society’s changing at light speed. So you have to accommodate their needs and wants, and that’s where we think Lewis has a nice edge. We can take care of them so they don’t have to fight traffic and go somewhere else.”

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Roots in pharmacy

It’s a small example of innovation but a telling one. For decades, Lewis Drug has offered flu shots and organized events around getting people immunized.

“And it wasn’t until the last four or five years where that really got to be a competitive thing,” said Scott Cross, the company’s executive vice president who also oversees its pharmacy business. “We did it primarily as a service, and now everybody has jumped in the game.”

The competitive landscape for drugstores is more complex than ever, according to Jim Whitman, senior vice president of member programs and services for the National Association of Chain Drug Stores. He calls Lewis Drug an industry leader in customer service and innovation.

“Our industry is one of the most competitive out there,” Whitman said. “Our industry has traditional drugstores, mass merchandisers like the Walmarts and Targets of the world, and then you have the food and drug companies. All three of them play in our space, and it’s a testament to Lewis … to be able to understand it, compete against it, move forward, and grow and sustain.”

Customers expect businesses that deal in pharmaceuticals to be able to answer questions, carry their desired products and help with health and wellness issues, Whitman said.

“And they want a pleasurable shopping experience,” he said. “The layout, the colors, the lighting. You’ve got to constantly reinvest in your company, and Mark and Lewis do a very good job of that.”

Cross agreed pharmacy is a competitive and complex industry.

“The competition has really forced us to get better. From adding pharmacy drive-up windows to new technology in the pharmacy and in the front-end part of the business,” he said. “The pharmacist is probably the most accessible health care professional, and I think more and more patients are seeing that.”

Lewis also is rolling out an innovative program to sync patients’ medications, something seen only in a couple of regional chains and new to this area.

“It allows people who have multiple prescriptions, rather than having to make seven or eight trips a month, we’re trying to work with the physician so they can come to the store once a month,” Cross said. “That’s really the next big push.”

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Changing retail scene

While the majority of Lewis’ locations are classified as traditional drugstores, 10 of them – including those in the Sioux Falls market – aren’t. They exceed 40,000 square feet and sell a wide range of merchandise from furniture and liquor to lawn and garden items.

Griffin estimates Lewis carries 75 percent to 80 percent of items that would be found in a typical big-box store. The key is figuring out the product mix customers want.

“We have a terrific group of merchants and buyers,” Griffin said. “We probably buy goods from 3,000 to 4,000 sources. There are still opportunities if you look hard enough but certainly not the same as 20 to 30 years ago. There’s a retail evolution, and as long as you stay ahead of the curve you’re OK.”

Bob Meyer, Lewis’ senior vice president of merchandising and marketing, points to the company’s newest Sioux Falls store at 69th Street and Louise Avenue as a template for the future. The store features an open, brighter look with lower fixtures, an expanded lawn and garden center, and a larger selection of food and beverages.

The flow of the store is all about convenience, Meyer said.

“Our target demographic is the female shopper, and we realize most females are on very busy schedules,” he said. “We have milk, eggs and bread in the front of the store. We have a beauty boutique area … that has done very well, and you will start seeing that in other locations.”

Concepts in the new store are being integrated into other Lewis locations as they remodel. The company also is testing an expanded pet department at its store on 12th Street and Kiwanis Avenue, and is focusing on further developing its toy department.

In recent years, customers have started traveling less and investing more in their homes, Meyer said.

“They’re spending more on home essentials, home decor, furniture, the outdoor patios, making that their destination rather than maybe going on a summer vacation,” he said.

Lewis has found success through an intense knowledge of its customers, said Shawn Lyons, executive director of the South Dakota Retailers Association.

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“There’s not a Lewis store I’ve walked in that you don’t see a store manager or an employee engaged with customers, and you know there’s a relationship there,” Lyons said. “It reflects in their pricing. It reflects in how their store is set up. They understand the economy of sticking to the basics of what the customer is looking for. They’ve done a phenomenal job of not messing with that formula and only enhancing it over time.”

Future growth

Lewis is expanding westward with two locations in Mitchell – a standalone store and a pharmacy inside County Fair Food Store.

The company also recently acquired Casey Drug and Jewelry in Chamberlain.

“That means growth,” Griffin said. “That means a gateway to the next part of the state.”

In spite of a challenging retail environment, Lewis is in a growth pattern that has added two or three stores annually.

“The survivors in retail are good,” Griffin said. “You have to be good to survive and succeed. It’s much more challenging than it was 20 years ago. The Internet and the pricing structures on the Internet, the Amazons of the world, it totally changes the way people buy and causes your business to be more challenged. But it also causes you to be better merchants because you have to be.”

Lewis owns land at 69th Street and Cliff Avenue and is considering additional locations, Griffin said.

“We appreciate the opportunity to be here 70 years. It’s quite an honor,” he said. “We expect there will still be a place for us in growth in Sioux Falls.”

Lyons agreed, calling Griffin “somebody who believes in where his stores are located.”

“That started with his father and has carried onto him, and I’m sure his daughter will go down that path,” Lyons said. “They’re just a very successful family. Family-succession planning and carrying on to the next generation is getting harder and harder to do.”

For Nikki Griffin, who grew up playing with the company copy machine, then bagging during the holidays when she was 11 and working in the camera department during high school, the legacy of Lewis doesn’t weigh lightly.

“It’s extremely meaningful. It’s intimidating and something that I’m grateful for, but I have a lot to learn,” she said. “Getting into this end, I see how nuanced and multifaceted everything is. It’s kind of awe-inspiring. It’s a big machine. But part of what helps the machine function and succeed is the loyalty of the Sioux Falls customers. They still value a local-owned business, and they’re still loyal. They’re helping the company continue to succeed. We need that.”